How NY Measures Up for College Student Debt: New Report

As the Hudson Valley's college students prepare for the fall semester, a look at the student debt situation shows that New Yorkers rank below the median, according to a new study from the personal-finance website WalletHub.

According to its in-depth analysis of 2016’s Best and Worst States for Student Debt, New York ranks 36 out of 51 (states plus Washington, DC).

The problem is huge. Student loans are second only to mortgages as Americans' largest household debt and 11 percent of all student loans are in delinquency or default as of Q1 2016.

And our collective debt keeps growing.

At the end of the first quarter of 2016, total outstanding college-loan balances disclosed on credit reports stood at $1.26 trillion, according to the Federal Reserve Bank of New York. The latest figure represents an increase of $29 billion from the previous quarter and $72 billion from a year ago.

"Being burdened by debt is a stifling, stressful and emotional reality, and most of our recent college grads start their lives in the red," said Brendon McQueen, founder of tuition.io. "I graduated from Columbia University in 2009 with 12 student loans totaling $120K, have since had three children and started my company tuition.io, and am still paying off my student loans. The struggle is real for the 42 percent of us millennials that claim debt to be our biggest concern."

Despite the evidence that income potential rises and chances of joblessness decline with more schooling, many graduates entering the labor market are learning the hard way that a college degree can’t guarantee financial security. Post-college success depends on numerous factors, including where a graduate chooses to put down roots. Student-loan borrowers generally fare better in strong-economy states with low college-debt-to-income ratios.

New York doesn't do well there at all, being one of the states with the highest student debt as a percentage of income.

Highest Student Debt as % of Income

• 47. New York
• 48. South Carolina
• 49. Hawaii
• 50. Oregon
• 51. DC

Lowest Student Debt as % of Income

• 1. Wyoming
• 2. Utah
• 3. North Dakota
• 4. Minnesota
• 5. Virginia

On the other hand, New York has a stronger job market than many, WalletHub reported. In terms of the unemployment rate for people between the ages of 25 and 34, the state ranked 19th.

In order to identify the states that are friendliest toward student-loan debtors, WalletHub’s analysts compared the 50 states and the District of Columbia across nine key metrics. The data set ranges from “average student debt” to “unemployment rate for people aged 25 to 34” to “percentage of students with past-due loan balances.”

Student Debt in New York (1=Best; 25=Avg.)

• 31st – Average Student Debt
• 23rd – Proportion of Students with Debt
• 47th – Student Debt as % of Income (Adjusted for Cost of Living)
• 19th – Unemployment Rate for People Aged 25 to 34
• 36th – % of Student-Loan Borrowers Aged 50+
• 26th – Availability of Student Jobs

McQueen, whose company tuition.io helps companies build student loan contributions into their employee benefits packages, recommends carefully researching options, thoroughly understanding your payment schedule and plans, and have periodic reality checks to get a sense of how much you have borrowed and how many years of loans you will have to go.

For the full report, please click here.

IMAGE via WalletHub